It usually results in the lowest net income, Compared to other methods of calculating depreciation.
Net income is the amount of money you may have left over after taxes and other withholdings from your paycheck. Positive or negative net income is possible. You have a positive net income if your business generates more money than it spends. You have a negative net income, also known as a net loss, if your entire expenses outweigh your earnings. Depreciation is a phrase that covers two distinct but related ideas: the actual decline in an asset's fair value, for example, the annual decline in the value of factory equipment Depreciation is the practice of taking the whole cost of an expensive item you purchased for your business out of consideration.